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favourable PR; or in the case of low…cost housing; providing amenities is a 
usual requirement in ge。。ing planning consent for a property development 
or a site for; say; a supermarket。 
UNILEVER – EMBEDDING ETHICS 
In 1887; William Hesketh Lever; already a highly successful soap manufacturer; 
was looking for a new site for his factory to allow him to expand。 
The site also needed to be near a river for importing raw materials; and 
near a railway line for transporting the finished products。 The 56 acres 
of unused marshy land at the site that became Port Sunlight; named 
after his soap; was far more than he needed simply for manufacturing 
purposes。 Lever had something more all…embracing in mind。 His stated 
aims were to create an environment that allowed his workers ‘to 
socialize and Christianize business relations and get back to that close 
family brotherhood that existed in the good old days of hand labour’。 
His intention was to extend his responsibilities beyond making money for 
himself and to share that; albeit on his own terms; with everyone who 
worked for him。 Between 1899 and 1914 Lever built some 800 houses; 
taking an active part himself in the design。 The munity’s population 
of 3;500 shared allotments; public buildings; including the Lady Lever Art 
Gallery; schools; a concert hall; open air swimming pool; church; and a 
temperance hotel。 His cottage hospital; built in 1907; continued until the 
introduction of the National Health Service in 1948。 He also introduced 
schemes for welfare; education and the entertainment of his workers; 
and encouraged recreation and organizations which promoted art; 
literature; science or music。 
Unilever; as the pany is now known; has carried the Lever values 
and vision on into corporate life。 The pany’s behaviour in all affairs 
is governed by a set of clear; stated and municated guidelines。 
Starting with its core value; ‘As a multi…local multinational we aim to 
play our part in addressing global environmental and social concerns 
through our own actions; and working in partnership with stakeholders 
at local; national and international levels’; the pany has developed 
a prehensive set of principles to guide its behaviour in all aspects of 
its work。 The guidelines it expects employees to work to include always 
working with integrity with ‘the highest standards of corporate behaviour 
towards everyone we work with; the munities we touch; and the 
environment on which we have an impact’。 The full value statement 
can be seen on its website at this link (unilever/ourvalues)。
226 The Thirty…Day MBA 
UNDERSTANDING STAKEHOLDERS 
So we can see that directors and by extension the managers of an organization 
first saw that their primary; o。。en their only; responsibility was to 
look a。。er the shareholders’ interests。 Measures were; and still are; taken 
to a。。empt to ally their interests; for example linking bonuses to share 
price or profits。 For the most part these a。。empts have failed; as the case 
of Enron showed; where shareholders were systematically deceived。 Also; 
in the whole sub…prime debacle bankers were rewarded for systematically 
repackaging toxic loans and spreading them in near…undetectable layers 
around the globe; to the eventual detriment of their shareholders and the 
taxpaying public at large who had to pick up the bill。 But even where it is 
possible to ally directors’ interests with those of shareholders; that leaves a 
myriad of other interested parties effectively disenfranchised; except in so 
far as they are expressly protected by laws。 
The idea that businesses had a responsibility other than to shareholders 
was brought to popular a。。ention in Howard R Bowen’s book Social Responsibilities 
of the Businessman (1953; New York: Harper and Brothers); but it 
was a decade later before the term ‘stakeholder’ was coined in an internal 
memorandum at the Stanford Research Institute in 1963。 Over the next 
two decades the term stakeholder was debated and defined until Edward 
Freeman; a professor at the Darden School of Business (darden。 
virginia。edu); University of Virginia; in his book Strategic Management: A 
Stakeholder Approach (1984; United States: Pitman Bowen); set out simple 
guidelines that anyone in an organization could understand and follow。 
Freeman’s stakeholders were defined as ‘any group or individual who can 
affect or is affected by the achievement of the organization’s objectives’。 
MAPPING OUT THE STAKEHOLDERS 
Freeman (see above) divided stakeholders into six distinct categories; owners; 
employees; customers; suppliers; munities and governments; with 
which an organization has varying responsibilities or ‘social contracts’。 The 
first step in the process of developing an ethical strategy is to identify all the 
people; institutions and agencies that your organization is likely to impinge 
on in the normal course of its activities。 
Figure 9。1 gives an example of a stakeholder map。 It shows how stakeholders 
move outwards from the individual at the centre; to internal groups 
including their immediate work environment; colleagues; team and peers; 
and on to external groups; suppliers; customers; shareholders and eventually 
on to ever…distant publics and organizations。
Ethics and Social Responsibility 227 
ASSESSING OBLIGATIONS 
Not all stakeholders will be affected by any one particular strategy or course 
of action; nor will those that are affected be affected to the same degree。 So 
the next step in the process is to see which stakeholders will be affected and 
to what degree。 This can be done using a Stakeholder Relevance Matrix; as 
in Figure 9。2。 This shows which stakeholder groups will be affected by the 
decision to relocate a production unit to a new lower…cost country。 
Figure 9。1 Stakeholder mapping 
You 
Organization 
Shareholders 
Customers 
Suppliers 
Government 
petitors 
Department 
Teams
Peers 
Town/Immediate Neighbourhood 
Your Country/Region 
Other Countries and Regions 
Industry/ business sector 
International governments 
Wider publics affected 
Figure 9。2 Stakeholder relevance matrix 
Proposed strategy 
Move production to 
lower…cost country 
Positively affected Adversely affected 
Directly affected Employment created in 
new country 
New munity in new 
country 
Existing workforce 
Existing munity in 
existing country 
Local subcontractors will 
lose work 
Indirectly affected Shareholder returns 
improved 
Home government gets 
less tax 
Management will have to 
travel more
228 The Thirty…Day MBA 
The next step in the process is to analyse the specific interests/expectations 
and rights/responsibilities of each affected stakeholder group。 Following 
through with the example of relocating a factory; we can see in Figure 9。3 
the different expectations and rights of the three stakeholder groups seen to 
be most relevant to this decision。 
Figure 9。3 Stakeholder rights and expectations grid 
Stakeholders 
Customers Shareholders Employees 
Rights Be given 
information on all 
factors concerning 
new production 
source 
To be informed in the 
annual report and 
accounts or sooner if the 
implications will cause 
public discussion 
To statutory 
redundancy 
payments 
Expectations Any change should 
be seamlessly 
implemented 
That the pany will 
treat employees properly 
That the move is in the 
long…term best interest of 
the organization 
To be consulted 
and given help with 
job search 
STAKEHOLDER STRATEGIES 
Having identified the stakeholders and weighed up their rights and expectations; 
an organization has basically three possible ethical stances it 
can take: 
。 Immoral business: Make decisions that are clearly unethical to large 
groups of stakeholders。 The Mafia and organized crime in general 
certainly fit into this category; as in many respects do the sex industry; 
large tracts of the gambling industry and arguably the tobacco and 
drinks industry too。 These last three are accepted as being a customer’s 
inalienable right to free choice; aided by being major employers and 
taxpayers。 
。 Amoral business: Make decisions without

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